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Merger Would Reduce Competition in the Sale of Branded Butter
in New York, Philadelphia Metropolitan Areas

WASHINGTON, D.C. -- The
Department of Justice today filed a civil antitrust lawsuit to
block Dairy Farmers of America Inc. from acquiring the assets of SODIAAL North
America
Corporation because the transaction would result in higher prices for branded butter in
the New
York and Philadelphia metropolitan areas. Dairy Farmers of America Inc. makes
"Breakstone"
butter and SODIAAL makes "Keller's" and "Hotel Bar."

The Department's Antitrust Division filed a
complaint today in U.S. District Court in
Philadelphia, charging that, if consummated, the merger would reduce competition in
the sale of
branded butter sold at retail outlets in the New York and Philadelphia regions. At the
same time,
the Department asked the Court for a temporary restraining order preventing Dairy
Farmers of
America Inc. and SODIAAL from consummating the transaction until the Court rules on
a
motion for a preliminary injunction to prohibit the transaction.

"No one should have to pay higher
prices for an American staple such as butter," said
Joel I. Klein, Assistant Attorney General of the Department's Antitrust Division. "Unless
this
deal is blocked, that's exactly what will happen in the New York and Philadelphia
metropolitan
areas. We brought this suit to preserve competition by preventing the elimination of a
strong
independent competitor."

Butter, sold both as quarter-pound
sticks and in tubs in whipped form, is advertised as a
special by retailers to attract customers to stores. Many consumers consider branded
butter to be
a superior product and pay a premium for it.

According to the lawsuit, Dairy
Farmers of America Inc. and SODIAAL are two of only
three principal suppliers of retail branded butter in the New York and Philadelphia
metropolitan
areas. The complaint states that the two companies compete directly and aggressively
on the
basis of price, promotional allowances, service, brand support, product improvements,
and other
facets of competition in the sale of branded butter in these areas.

Dairy Farmers of America Inc.
manufactures and markets a variety of dairy products
across the United States, including the "Breakstone" brand of butter, which is sold in
retail
channels throughout the East Coast. SODIAAL manufactures and markets the
"Keller's" and
"Hotel Bar" brands of butter for sale in the northeastern United States.

In the greater Philadelphia and New
York metropolitan areas, approximately 80 percent
of butter sold at retail outlets is sold in stick form. Nearly all of the remaining 20 percent
of
butter is whipped and is typically sold in half-pound tubs.

According to the complaint, Hotel Bar
accounts for 27.8 percent of branded stick butter
sales and 14.6 percent of branded whipped butter sales in the New York metropolitan
area. In
the New York area, Breakstone accounts for 11.7 percent of branded stick butter sales
and 47.1
percent of branded whipped butter sales. In the Philadelphia metropolitan area, Keller's
accounts
for 43.6 percent of branded stick butter sales and 26.5 percent of branded whipped
butter sales.
In that area, Breakstone accounts for 1.3 percent of branded stick butter sales and 23.8
percent of
branded whipped butter sales. If the merger were allowed to proceed, Dairy Farmers of
America
Inc. and one other supplier would control almost 100 percent of branded butter sales in
these
markets.

Dairy Farmers of America Inc. is an
agricultural cooperative based in Kansas City,
Missouri. It owns and operates dairy processing plants throughout the United States,
including
butter-producing plants in Winnsboro, Texas, and Goshen, Indiana. In 1998, the
company had
net sales of approximately $7.3 billion.

SODIAAL, headquartered in
Harleysville, Pennsylvania, is a privately-held subsidiary of
a French cooperative. It owns and operates one butter-producing plant, Mayfair
Creamery, in
Somerset, Pennsylvania. In 1998, SODIAAL had net sales of approximately $238
million.